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iShares Global Healthcare Index ETF (CAD-Hedged) (XHC)
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Harvest Healthcare Leaders Income ETF (HHL)
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Evolve Global Healthcare Enhanced Yield Fund (LIFE)
Q: Hi 5i, we need to increase our Healthcare allocation.
Currently hold XLV in our non-reg account, and are satisfied with it.
We need to use CA$ funds in our RIF's to increase, and are looking
at HHL, XHC, and LIFE (little unsure with LIFE as their website has faulty info).
We are looking for income plus some growth.
Could you provide some analysis of these 3 options,
and any other suggestions that you might see.
Thanks as always for your assistance. T.
Currently hold XLV in our non-reg account, and are satisfied with it.
We need to use CA$ funds in our RIF's to increase, and are looking
at HHL, XHC, and LIFE (little unsure with LIFE as their website has faulty info).
We are looking for income plus some growth.
Could you provide some analysis of these 3 options,
and any other suggestions that you might see.
Thanks as always for your assistance. T.
5i Research Answer:
HHL and LIFE are both covered call ETFs for the healthcare sector, and thus will have a downward pressure on its price appreciation compared with XHC.
XHC has a good AUM and pays a distribution of 1.1%, on the lower side if one is looking for yield. HHL has a good AUM and pays a high yield of 9.0%, but this is due to a covered call strategy, and the ETF will likely see lower price appreciation than the XHC ETF. LIFE has a lower AUM but a good distribution yield of 9.5%, but this is similar to HHL which uses a covered call strategy. Overall, due to its higher liquidity, we would prefer HHL for a combination of high yield and some potential for growth, while also acknowledging growth potential will be capped due to the covered call strategy.